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Family insurance coverage in danger under new health care law

By The Associated Press Published: Thursday, August 8, 2013, 12:01 a.m. Updated: Thursday, August 8, 2013 NEW YORK — One casualty of the new health care law may be paid coverage for families of people who work for small businesses.

Insurance companies have warned small business customers that premiums could rise 20 percent or more in 2014 under the Affordable Care Act. That's making some owners consider not paying for coverage for workers' families, even though insurance is a benefit that helps companies attract and retain top talent. If more small business owners decide to stop paying for family coverage, it will accelerate a trend that started as the cost of health insurance soared in recent years.

Under the law, companies with 50 or more employees are required to provide affordable coverage for their workers. They also must offer health insurance to employees' dependents, but don't have to pay for it. And they are not required to offer insurance at all to employees' spouses.

Mike Shoop got a taste of what buying insurance will be like under the new law when he shopped for a policy that will take effect Sept. 1. His insurer quoted premiums 8 percent higher than his current policy and warned Shoop that he would get an even larger increase a year from now.

Shoop, who owns a debt collection company in Greeley, Colo., said he may have to cut back on insurance for his employees' families if rates keep soaring.

“We're very generous in what we pay,” said Shoop, the owner of Professional Finance Co. “But like most companies, we're about at our maximum of the total dollars that we can spend on health care.”

Premiums have been soaring for years because of the rising cost of medical care. But the Affordable Care Act also has requirements that may drive premiums higher, including a tax on insurance companies that is expected to be passed along to employers.

Shoop's insurer has warned that the tax could send his premiums up more than 20 percent a year from now.

“It's going to be very significant,” Shoop says. “We're really going to have to do a juggling act, and so are our employees.”

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